Chevron announced on Wednesday its intention to more than double its oil production in Venezuela, increasing output from approximately 280,000 barrels per day (bpd) to 600,000 bpd over the next five years. This expansion is supported by a $7 billion investment and the acquisition of two additional oilfields in the Orinoco Belt, which is known for its vast reserves of extra heavy crude.
Chevron is currently the only U.S. oil major operating in Venezuela through joint ventures with the state-owned oil company PDVSA. CEO Mike Wirth emphasized that the improved terms and additional acreage will enhance Chevron's portfolio, enabling low-cost oil growth and creating long-term value.
This announcement aligns with U.S. government efforts to boost oil production in Venezuela through private investments, especially as the country's oil infrastructure has suffered from years of mismanagement.
Recent developments include the U.S. securing majority control over 65 billion barrels of Venezuela's crude oil reserves, which is about 20% of the estimated total reserves of 303 billion barrels. The U.S. has partnered with North American Blue Energy Partners to develop these reserves, with concessions granted for 100 years.
Following the announcement, Chevron's shares saw a slight increase of less than 1% in premarket trading